QUANTITATIVE EASING

European markets rose Wednesday following an overnight rally in the Wall Street amid anticipation that the U.S. Federal Reserve would announce further quantitative easing to support the economy.

Without a stronger effort by the central banks -- in the form of a coordinated quantitative easing measure to correct the ailing European banking system -- the global economy (at best) will only limb along.

Crude oil futures declined Friday as the lack of explicit hints about further quantitative easing from Fed Chairman Ben Bernanke disappointed investors.

Chinese shares edged higher Friday after the People's Bank of China lowered benchmark interest rates for the first time in three years to boost economic growth.

Home prices are stagnant, crude oil is tumbling and copper has fallen to a seven-month low. Inflation is not the problem. What is the problem is inflation's evil twin, deflation.

This backdrop of the weakening of the global economy could promote a broad round of coordinated central bank easing.

A third straight month of disappointing job data clearly suggests that the U.S. labor market conditions are deteriorating again, which economists say will undoubtedly prompt more speculation that a third round of quantitative easing by the U.S. Federal Reserve is coming soon.

You can't blame investors for feeling a bit squeamish regarding deploying new money in the U.S. stock market these days, with the Dow Jones Industrial Average?s (DJIA) recent slide from 13,300 to 12,450 unnerving even the most experienced institutional investors. Where?s the market headed in the next six months?

China's manufacturing activity fell in May compared to April and continued to contract for the seventh straight month, according to the preliminary HSBC Flash Purchasing Managers Index (PMI) released Thursday.

U.S. Federal Reserve policymakers kept the door open to a fresh round of monetary stimulus, citing downside risks to a moderately expanding economy, according to minutes for the central bank's April meeting.

The risk of inflation is keeping the Federal Reserve from doing more to support the U.S. economy, even though the threats to price stability are reasonably contained at present, a Fed official said Thursday.

Gold prices retreated towards $1,650 an ounce on Wednesday as the dollar strengthened against the euro, after a downbeat reading of euro zone manufacturing activity contrasted with stronger data from the United States.

Gold touched two-week highs on Tuesday, set for its longest stretch of daily gains in eight months, after a rally in the dollar fizzled out as investor concern escalated over the resilience of the U.S. and euro zone economies.

Asian stock markets ended with gains on Monday as disappointing US economic activity data boosted hopes for further monetary stimulus from the Federal Reserve.

The Bank of Japan will expand its Asset Purchase Program by an additional 5 trillion yen ($62 billion) to increase the purchase of Japanese government bonds, exchange-traded funds and Japan real estate investment trusts, the bank announced in a statement Friday.

The Bank of Japan said Friday that it is further easing the monetary policy so that the economy could recover from deflation and grow more strongly.

Gold prices rose towards $1,650 an ounce on Thursday after the Federal Reserve opted to keep U.S. interest rates at rock bottom, taking further support from the foreign exchange market as the dollar languished against a basket of major currencies.

The target U.S. interest rate will remain at its current level of 0 to 0.25 percent through late 2014, the Federal Open Market Committee led by Federal Reserve chairman Ben S. Bernanke decided at a meeting Wednesday.

The Federal Reserve resumed a two-day meeting on Wednesday that is expected to yield upward revisions to its growth forecasts but not enough for officials to take off the table the option of a further easing of monetary policy.

The United Kingdom, Europe's third-largest economy, fell into recession in the first quarter when its gross domestic product fell 0.2 percent, a contraction that followed the fourth-quarter's 0.3 percent decline.

The euro hovered near a three-week high and global shares rose on Wednesday ahead of the U.S. Federal Reserve's policy meeting, due mainly to signs of good demand for euro zone sovereign debt before a German bond sale, and some strong corporate earnings.